The Hong Kong Securities and Futures Commission (SFC) today warns the public of an unlicensed virtual asset trading platform (VATP) known as Bybit, which offers trading services in crypto-related products in a number of jurisdictions.
The concerned crypto-related products offered by Bybit include:
- Bybit Futures Contracts and Inverse Futures Contracts;
- Bybit Options;
- Bybit Leveraged Tokens;
- Dual Asset;
- Dual Asset 2.0;
- Bybit Shark Fin;
- Liquidity Mining;
- ETH 2.0 Liquid Staking;
- Bybit Web3 Staking;
- Bybit Lending; and
- Bybit Wealth Management.
The SFC is concerned that these products have also been offered to Hong Kong investors and wishes to make it clear that no entity in the Bybit group is licensed by or registered with the SFC to conduct any “regulated activity” in Hong Kong.
In Hong Kong, crypto-related products may constitute “futures contracts” or “securities” under the SFO and if so, dealing in and/or marketing these products – whether in Hong Kong or targeting Hong Kong investors – constitute a “regulated activity” and require a licence from the SFC unless an exemption applies. It is a criminal offence to carry out regulated activities without a licence.
It is also an offence for any person to issue advertisements, invitations or documents relating to these products to the Hong Kong public without the SFC’s authorisation. Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions.
The SFC has added Bybit on the Suspicious Virtual Asset Trading Platforms Alert List and its crypto-related products on the Suspicious Investment Products Alert List on 14 March 2024.
The regulator cautions investors against investing with unlicensed entities. Investors may risk losing their entire investment made with an unlicensed entity if it ceases operation, collapses or otherwise suffers from any misappropriation of assets. Seeking recourse against entities that do not have a nexus with Hong Kong is likely to be difficult and legal remedies may not be available.
Last but not least, the SFC will not hesitate to take enforcement action against unlicensed activities where appropriate.
